Karachi, December 30, 2016: JCR-VIS Credit Rating Company Ltd. (JCR-VIS) has reaffirmed Fund Stability Rating of Askari Islamic Income Fund (AIIF) at ‘A+(f)’ (Single A Plus (f)). The previous rating action was announced on December 31, 2015.

As per its revised offering document, AIIF is required to maintain at least 25% of net assets in Islamic Banks (or Islamic Banking windows) for the purpose of ensuring adequate liquidity, while other investment avenues of the fund include sovereign fixed income securities, spread transactions, secured Sukuks and certificates of Mudarabah and Musharikah. Assets of the fund were primarily deployed in Ijarah Sukuks, corporate sukuks and liquid avenues such as cash or bank deposits in FY16. For the period under review, the fund has been largely in compliance of our internal credit quality criteria; however, the same is expected to ensure consistency in compliance going forward.

Net assets of the fund decreased to Rs. 487m at end-FY16 (FY15: Rs. 651m) primarily on account of redemptions by unrelated corporations. Weighted Average Maturity (WAM) of net assets is capped at 4 years, excluding government securities. Actual WAM of the net assets remained below 2 years throughout FY16. Sensitivity to interest rate risk was considered lower given duration of 0.28 years at end-FY16.

For further information on this rating announcement, please contact the undersigned (Ext: 207) or Mr. Javed Callea (Ext: 201) at 021-35311861-70 or fax to 021-35311873.

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